Factors Influencing the Cost of Health Insurance
Health insurance policy costs and premiums vary widely depending on the amount of coverage and types of benefits you choose. However, many other factors also affect the cost of your policy. Your medical, family and financial history can all drive up the costs of your policy, or work in your favor to keep costs low. Knowing all the factors that can contribute to the costs of your health insurance policy can help you to find low cost health insurance that suits your needs.
Factor that Affects Health Insurance Cost: Age
Age is a significant contributing factor to health insurance premium costs. Older people will generally pay higher premiums than younger people, even with similar medical histories. Older people are more likely to experience health problems, and they therefore cost insurance companies more money than younger people. The exact relationship between age and health insurance premium costs is difficult to determine, but age is one component of formulae insurance companies use to calculate premium costs.
Factor that Affects Health Insurance Cost: Medical History
Both personal medical history and family history also play a role in determining the cost of health insurance. Before providing you with a quote, insurers will often request information about:
- Chronic conditions
- Family history of hereditary conditions, such as high blood pressure and high cholesterol
- Habits such as smoking and drinking
The insurance company will use this information to determine the level of risk involved in providing you with coverage. An individual whose history places them at a higher level of risk will likely pay a higher premium than an individual with a comparatively clean personal and family medical history. It may also be more expensive to get health insurance with preexisting conditions, depending on your policy and other risk factors.
Other Factors that Affect Health Insurance Costs
Your credit score and credit history may also affect your premiums, with a poor credit score leading to higher costs. Your credit score is an indication of how responsible you are with your money, and how likely you are to repay money owed. If you have a poor credit history, the insurance company may increase the costs of your premiums to lower their risk of loss if you default on your payments.
Within the policy itself, the costs of the deductible can affect the overall cost of the premium. The deductible is the amount you must pay before the insurance company begins to pay benefits. A higher deductible means a lower premium and vice versa. In addition, a lower cost up-front premium may also be associated with higher co-payments for medications and office visits.
The type of coverage you have also influences the costs of your health insurance policy. Costs for individual insurance, which you acquire and pay for yourself, tend to be more expensive than for group insurance, which you can get through your employer. Group health insurance is less expensive because the costs of the policy are spread out between all the individuals covered under the policy, and is usually the best bet for finding low cost insurance.